The Wall Street Journal posted an interesting article about year-over-year changes in corporate SEC disclosures concerning climate matters:
“In total, the number of securities filings containing terms related to droughts, floods, wildfires and extreme heat declined 31% in the first five months of 2025 from the same period a year earlier, according to an analysis by The Wall Street Journal of data from Factiva, a product of Dow Jones, publisher of the Journal. Mentions of climate change were down a similar 32% over that time.
The declines are a significant turnaround from a 22% rise in the number of documents containing climate-risk terms between 2022 and 2024.
The analysis, of more than 200,000 securities documents between 2024 and 2025, found mentions of flood-related terms fell nearly 40% while terms related to extreme heat declined 29%.”
Source: Wall Street Journal/Factiva
The two biggest decreases 2024-2025 were “climate change” (799 versus 544) and “floods” (230 versus 142).
Arguing that the change is appropriate due to political risk and the death of SEC’s climate disclosure rule could be problematic. If a company considered climate or floods a material risk requiring SEC disclosure last year, why would those risks no longer be relevant or material a mere 12 months later? Yes, there are valid explanations, but I am not sure those explain 100% of the changes.
The SEC’s 2010 interpretive release providing guidance to public companies regarding the Commission’s existing disclosure requirements as they apply to climate change matters is still effective. That release was issued to “to remind companies of their obligations under existing federal securities laws and regulations to consider climate change and its consequences as they prepare disclosure documents to be filed with us and provided to investors.”
Given that, a dramatic year-over-year change in material climate risk disclosures could trigger comment letters, investigations and possibly enforcement. You better be ready with a good explanation and good data.
Members have access to our SEC 10-K Item 1A Risk Disclosure Language compendium from 2024 and 1Q25, which we developed as a result of seeing these changes early on this year.
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